KP Health Department’s Human Capital Investment Project Marred by Massive Irregularities

The Human Capital Investment Project (HCIP), launched by the Khyber Pakhtunkhwa Health Department to improve basic healthcare services, has reportedly failed due to large-scale financial and administrative irregularities. The Rs24 billion project, funded with the support of the World Bank, has allegedly suffered losses amounting to more than Rs16 billion, according to audit findings.

The project was initiated in March 2021 after approval from the World Bank’s board, in line with the former PTI government’s slogan of “investing in people instead of roads.” The initiative covered four districts—Peshawar, Nowshera, Swabi, and Haripur—with the stated objective of strengthening primary healthcare facilities. However, serious concerns over transparency and governance have emerged.

According to official audit documents, contracts for the reconstruction of health facilities damaged during the 2022 floods were awarded in violation of procurement rules. Out of 158 buildings, multiple contracts were reportedly given to only two preferred companies, despite regulations barring the allocation of more than one contract to a single firm. Overpricing in construction and repair work caused an estimated loss of Rs7.8 billion.

The audit further revealed that Rs1 billion was spent on medicines and supplies for family planning—an area that reportedly did not fall within the project’s approved scope—without any competitive bidding process. In addition, hospital furniture, medical equipment, and solar energy systems were purchased at prices several times higher than market rates, resulting in an estimated loss of Rs2 billion.

Auditors were unable to verify OPD receipts worth Rs7.8 million, while Rs200 million was allegedly paid to a favored company through a questionable hiring process. The report also highlighted the recruitment of more than 700 alleged “ghost employees” at wages below government-approved standards. Payments exceeding Rs510 million were reportedly made without any verifiable employment records.

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The audit identified that medicines worth over Rs570 million were procured without any documented demand from hospitals, and no records were provided to show where or how these supplies were utilized. Due to the absence of proper storage facilities, medicines were reportedly stored in girls’ hostels and even parking areas.

Additional irregularities included the misuse of over Rs30 million under fuel and miscellaneous expenses, the payment of millions of rupees in extra allowances to certain officials, and financial losses caused by failure to deduct sales tax from consultant firms and individuals. The audit also pointed to violations in recruitment procedures that caused further losses to the public exchequer.

Despite the seriousness of the findings, no action has reportedly been taken against officials named in the audit and monitoring reports. Instead, the Monitoring and Evaluation Expert who flagged the irregularities was removed from his position, and his contract was terminated without prior notice.

The revelations have raised serious questions about accountability, oversight, and governance within the provincial health sector, as well as the effective use of international development funding.